NPM 054-2007

Requesting Entity: Commission on Audit-Home Development Mutual Fund

Issues Concern: Lease of Office Space



Whether a contract of lease of office space may be procured through direct contracting.

Under R. A. 9184 and its IRR-A, the procuring entity shall adopt public bidding as the general mode of procurement. Alternative methods are resorted to only in highly exceptional cases set forth in Sections 48-54 of R. A. 9184 and its IRR-A.

Direct Contracting or single source procurement, one of the alternative modes of procurement, may only be employed by a procuring entity under the following circumstances:

  1. Procurement of items of proprietary nature which can be obtained only from the proprietary source, i.e. when patents, trade secrets and copyrights prohibit others from manufacturing the same item;

  2. When the procurement of critical plant components from a specific manufacturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions of its contract; or

  3. Those sold by an exclusive dealer or manufacturer which does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the Government.

Under the above-quoted provision, any of the conditions mentioned therein should be proven by the procuring entity to be complied with before it can resort to such mode of procurement.

[Section 53 of the IRR-A now includes lease of privately owned real estate for official use as one of the instances when the procuring entity may enter into Negotiated Procurement]